Donors who used a donor advised fund to make college loans to their son have been denied a charitable contribution deduction and ordered to pay capital gains taxes on stock sales within the fund plus an additional 20% penalty for underreporting of income tax due. The Tax Court has affirmed the decision of the Internal Revenue Service. ( Gundanna v. Commissioner , 126 T.C. No. 8, 2/14/11 .) In 1998, the donors transferred nearly $264,000 to a “family public charity” at the xélan Foundation after the husband sold his interest in a medical practice at a substantial gain.